The Light: Hillary

Esteemed Director of the UVA Center for Politics, Larry Sabato, is making some major predictions for the upcoming elections. Now, many of us are pretty sure how things are going to go, but Sabato is using some pretty good numbers to make his predictions sixty days out. Oh, yes, Republicans will take some seats, but wait until you see what Sabato predicts:

Watch the latest video at video.foxnews.com

Earlier today, Stuart Varney said this prediction will stabilize the stock market and help the economy. Why? Because if companies think the Republicans are going to take over control, they don’t have to worry about other big spending bills.

Sabato mentioned his site, the Center for Politics, and his article, “Sixty Days To Go.” Here is a snippet from his report:

[snip] We’ve been patient and cautious here at the Crystal Ball as a year’s worth of facts has accumulated. We’ve sifted the polls, cranked up the models, and watched the candidates and campaigns closely. All political observers have “gut feelings” about an election year, but feelings make for good songs and lousy predictions. Forecasting is an imprecise art. People who get too far ahead of the facts or are too insistent about what will happen are usually partisans—openly or in disguise.

The Crystal Ball’s predictions are clinical. We are fond of people in both parties. We cheer for no one.

2010 was always going to be a Republican year, in the midterm tradition. It has simply been a question of degree. Several scenarios were possible, depending in large measure on whether, or how quickly, the deeply troubled American economy recovered from the Great Recession. Had Democratic hopes on economic revitalization materialized, it is easy to see how the party could have used its superior financial resources, combined with the tendency of Republicans in some districts and states to nominate ideological fringe candidates, to keep losses to the low 30s in the House and a handful in the Senate. [snip]

I encourage you to read the rest here.

A stable economy – well, that is certainly something we have not seen of late. I guess time will tell, right?

Consider this an Open thread.

And given that, if I may take a moment of personal privilege, two things: 1. Earl is not coming near us, but Gaston might; and 2. as I mentioned in a comment recently, I will be having a total knee replacement (right knee) on September 9th. Some of you may recall I had a partial replacement 1 3/4 years ago on my left knee (and that one will be replaced in February – the partial didn’t help). My orthopedist informed me that as hard as my rehab was for the partial, it is MUCH harder for the total. That is all to say, I will be out of commission for a good bit. I am guessing at least a month. Bad timing for blogging the upcoming political season, but I cannot wait any more. Thanks for the support, and the understanding.

And Gaston? Well, my partner might be making a trip back down here to help our friend who is house/pet-sitting batten down the hatches. Like with the economy, we will wait and see.

“You’re either with us, or you’re not,” so says Dr. Wilmer Leon, a radio talk show host, about Obama and the African American community, in this article by Caroline May in The Daily Caller, “African-American Leaders And Intellectuals Express Dissatisfaction With President Obama.”

Oopsie daisy – sounds like another faction unhappy with Dear Leader. The African American community has been one of the most stalwart groups in supporting Obama in the polls, so this could be a troubling change for Obama. Those days may be coming to an end, at least for some in the community, and with good reason:

[snip]Since Obama has taken office African Americans have faced a number of disproportionate “highs,” few of them good, such as an exceptionally high unemployment rate, a high foreclosure rate, and a high number of African-American political figures deprived of the president’s support or dismissed from his administration (such as former White House social secretary Desiree Rogers, former Department of Agriculture official Shirley Sherrod, South Carolina Democratic U.S. Senate candidate Alvin Greene, former green energy czar Van Jones, Democratic Illinois Sen. Roland Burris, Democratic New York Gov. David Patterson, would-be Democratic New York Senate candidate Harold Ford Jr., and Democratic Reps. Charlie Rangel of New York, Maxine Waters of California and Kendrick Meek of Florida).

Dr. Cornel West, professor of African American Studies at Princeton University, is one African-American leader who has been far from pleased with Obama’s neglect of African-American issues. West told The Daily Caller that he has been extremely frustrated with the president’s relative disinterest in civil rights
issues.

“He can take the black base for granted because he assumes we have nowhere else to go,” West said. “But we just won’t put up with it. He has got to respect us.”

West is not the only black leader who feels this way. Behind the scenes, West says, many African-American leaders are not happy with Obama’s failure to address issues important to the black community, especially considering the support the community gave the president during the 2008 election. But, according to West, many of those dissatisfied leaders are hesitant to step forward.

“There hasn’t been a lot of talk about it because I think most black spokespeople, at the moment, are scared of the Obama machine,” West said. “A lot of us are trying to put the pressure on him without aiding and abetting the right wing.” [snip]

I just have to say, as someone living in SC, surely no one really expects Obama or ANY Democrat, for that matter, to support Alvin Greene. For heavens sake, the man was just indicted on two counts of showing pornography a couple of weeks ago. He was kicked out of a SC restaurant on Tuesday. Originally, it was a campaign stop – until those pesky little indictments came down. The organizers canceled the meeting, but Greene came anyway. He, and a companion, were, um, ushered out of the establishment. Heck, even I don’t blame Obama, or ANYONE, for steering clear of this guy. Just saying.

As for my former professor, Cornell West, it is a bit surprising that he, and others, like Dr. Leon, are speaking out already. Now, West was a Hillary supporter, just to be clear, prior to Obama’s being given the nomination by the rule-breaking DNC. But that does not mean he wouldn’t have some real expectations about what Obama might do for the African American community in this country.

Shelby Steele from the Hoover Institute, has some thoughts on the matter, as well:

[snip] Steele pointed out that Obama does not owe the black community as much as they believe he does due to the fact that whites were the ones who elected him — specifically by throwing their support to him during the Iowa caucus. Initially, the African-American community was significantly supporting Hillary Clinton’s candidacy.

“Once blacks began to see that whites were with Obama they didn’t want to be left standing at the station so they jumped on board,” he said. “They were not his base anyway. So he is not confused about that. That said, blacks will continue to vote for him. They vote for every Democratic candidate at a rate of 90% so Obama can absolutely take them for granted and will.” [snip] (Click HERE to read the rest.)

This raises a couple of points for me. One, not only are whites the ones who elected Obama, they are also the ones who REARED Obama. It is remarkable to me how completely and fully both Obama’s mother and grandmother have been wiped from history. They are the ones responsible for rearing him. That is to say, he was not raised in a traditional African American community. To pretend otherwise has been one of the most glaring manipulations of the entire election.

Two, yes, many in the African American community were breaking for Hillary Clinton. My first rally in Charleston was easily, easily 1/2 African American, if not more. But, when Obama and his campaign played the race card against Hillary Clinton in SC, employing that turncoat, backstabber, Jim Clyburn, that many in the African-American community turned away from her. She, along with her husband, were characterized as racists by Obama, and for some reason I still cannot fathom, the community, the COUNTRY, bought that, despite their long, long history standing in stark defiance of that claim. But they believed Obama.

Instead of a hard-working Hillary Clinton in the White House, who would indeed have worked on behalf of the African American community, and ALL Americans, who would not be taking vacation after vacation after vacation while the Home sales worsen, more jobs are lost, and the DOW tanks, they got Obama. Even if he IS vacationing in the “historically black section of Martha’s Vineyard” at a gazillion dollars a week, I might add.

Still – it begs the question: just what did the African American community think Obama was going to do specifically for them? Oh, wait – I remember:

Wow. That is still hard to believe, that anyone thought that would happen if Obama became president. But someone clearly spread that word – she was not the only one who seemed to think that was the case.

Anyway, I think Leon sums the issue up perfectly:

[snip] “My take on that is, you have to treat him the same way you would treat any other president,” Leon explained. “Especially since he is not giving you any reason to treat him otherwise. And it is going to be very difficult, whether it is 2012 and he is not reelected or it is 2016 and we’re dealing with a new president — who most likely will not be African American — it is going to be very difficult to hold that new president to a different standard.” [snip] (Click HERE to read the rest.)

There’s a concept – treat Obama like every other president. That would be a change, wouldn’t it? Holding Obama to all the same standards as every other president or presidential candidate? What a novel idea. It’s too late for the latter now, but 2012 is not that far away (it just feels like it is).

I guess we will just see how this continues to play out, and if the dissatisfaction with Obama trickles throughout the African American community, not just the leaders and intellectuals. Time will tell…

Well, at least according to Newsweek, that is. Yes, the brain trust at Newsweek have decided that the US ranks eleventh in the world.

Why? Well, I bet you can guess if you think about it for a minute. Give up? This headline by Brent Baker at Newsbusters will make it clear, “Newsweek Ranks U.S. the 11th ‘Best Country’ – Bush’s Fault, Obama Can Stem The Tide.” Yep, it’s all Bush’s fault, but Obama the Messiah can right this listing ship:

Newsweek, recently sold for one dollar by the Washington Post Company but still in its hands, ranked the United States 11th, just behind Denmark, in this week’s “The Best Countries in the World” cover story which put Finland at #1, followed by Switzerland and Sweden. There’s hope for improvement, however, thanks to George W. Bush’s departure from the White House and Barack Obama’s arrival. Michael Hirsh explained the beyond the top ten rank:

America hasn’t recovered from the serious blows to its stature delivered by nearly a decade of policy debacles. As Obama never tires of reminding the American public…he inherited a Herculean task: the Augean-stable-size mess left behind by George W. Bush.

The August 23 & 30 two-week edition cover story package certainly reflected Obama’s policy agenda. A sidebar (apparently not online) on the nations with the best health care, which put Japan at the top, touted fourth-best Spain where “universal coverage is a constitutionally guaranteed right, and there are no out-of-pocket expenses aside from some prescription drugs.” The U.S. wasn’t even one of the top ten countries listed (the full list online has the U.S. at #26 in health, tied with the Czech Republic and Chile and behind Slovenia.) [snip] (Click here to read the rest.)

Blech. Seriously, these people need to put down the Hopium pipe, and you know they’re on it. How else to explain selling a magazine for a BUCK? I mean, I know things are tight right now, but c’mon! Ahem.

Perhaps it would interest the authors of this piece to learn that Bush is actually more popular in some major “frontline” districts than their Revered One. It seems those areas are ones of great concern to Democrats since they currently hold the seats there. Oops!

But back to being Number 11 – woohoo, celebrate, woot, woot! I’ll let Stephen Colbert have the last word on this (again), and Newsweek, too:

There are some doozies in the news this morning. But first, in case you missed it, there was a big rally near Ground Zero on Sunday. Protesters and supporters of the mosque/cultural center plans to be built in that area showed up to make their voices heard. Clearly, this issue is not going away anytime soon:

Watch the latest video at video.foxnews.com

You know, when I saw the CNN report, I just knew that CNN was under-reporting the numbers of those opposed to the mosque being built near Ground Zero. And CNN made it seem as if there were a couple hundred protesters on BOTH sides. I knew they were full of crap:

[snip] Hundreds of critics and supporters of the proposed center in New York showed up despite an overcast and drizzly sky to express their views amid the national debate over the facility.

Police estimated that supporters of the center numbered up to 250, and critics numbered about 450 during the demonstration. [snip]

Uh huh. Nothing like inflating the numbers on one side, and deflating them on the other. Oh, you just gotta love the LMSM (Lame Mainstream Media). Or not.

By the way, if you think for one second Imam Faisal Abdul Rauf did not know that the landing gear from one of the planes flew into that building, and the relevance of it being so close to Ground Zero, you are sadly mistaken. That is why he picked that location, and why Muslims started coming to that building to pray. At least according to this December 8, 2009 NY Times article, “Muslim Prayers And Renewal Near Ground Zero“:

[snip]But for months now, out of the public eye, an iron gate rises every Friday afternoon, and with the outside rumblings of construction at ground zero as a backdrop, hundreds of Muslims crowd inside, facing Mecca in prayer and listening to their imam read in Arabic from the Koran.

The building has no sign that hints at its use as a Muslim prayer space, but these modest beginnings point to a far grander vision: an Islamic center near the city’s most hallowed piece of land that would stand as one of ground zero’s more unexpected and striking neighbors.

The location was precisely a key selling point for the group of Muslims who bought the building in July. A presence so close to the World Trade Center, “where a piece of the wreckage fell,” said Imam Feisal Abdul Rauf, the cleric leading the project, “sends the opposite statement to what happened on 9/11.” [snip] (Click here to read the rest.)

Nope, that site was no accident. It was chosen PRECISELY because it is close to Ground Zero, and because part of the landing gear fell.

Again, to those who keep acting like this is just some random site and those opposed to it are off our rockers, here’s the proof. From Imam Rauf’s own mouth. Satisfied yet? Yeah, that’s about what I expected – no amount of facts will matter. Whatever.

And then there is this story. It is no secret that California has been struggling mightily with its budget and deficits. That makes the following story even more disturbing than it would be otherwise:

Watch the latest video at video.foxnews.com

Have these people lost their minds? Marble? In a public high school? While they are having to cut back on Education? That is just nuts.

Okay, one more, if you can stand it. This is the former head of the DNC, failed presidential candidate, and former governor, Howard Dean, giving advice to the Obama camp. Wait until you hear it. There is a bonus discussion about an organization funding Republicans:

Watch the latest video at video.foxnews.com

Oh. My. Gosh. A bit of advice, Governor Dean – put down the Hopium pipe. You have had way too much…

And George Soros doesn’t hide behind an organization? Really? Huh. Is there an organization he funds that supports Democrats that has his name in it? If so, lemme know.

There ya go – a few stories of the day. Feel free to talk about these, or any other, stories.

“If my aunt had balls, she’d be my uncle!!”

I love that line. I first heard it on the trading desk at Bear Stearns in the early ’90s. For the last twenty years, I have used the line often to counter those who would bemoan an outcome with the standard, “If only . . .” My response typically generates a healthy chuckle and we then move on.

At this point, I feel comfortable amending the line from above to “If my aunt had balls, she’d be Mary Schapiro.” Too harsh, you say? I think not. How so?

Let’s review a recent Wall Street Journal article, Madoff’s Ghost Still Haunts SEC:

Financial executives aren’t the only folks lawmakers are pursuing. They also want to see more heads roll at the Securities and Exchange Commission.

Nearly 18 months after Bernie Madoff’s multibillion-dollar Ponzi scheme was exposed and almost a year after the SEC’s inspector general issued a blistering report, lawmakers are still questioning how the SEC staffers who reviewed the Madoff firm and investigated fraud allegations were being punished.

SEC Chairman Mary Schapiro told Congress during an oversight hearing that 15 of 20 enforcement attorneys and 19 of 36 examination staffers that dealt with the Madoff matter had left the agency. The SEC was still conducting a disciplinary process, she said, but it should be concluded soon.

Republican Rep. Bill Posey of Florida –- home to many Madoff victims -– said he wants to know if those SEC employees ended up at other regulatory agencies, working for companies they were supposed to regulate, or retired with government pensions.

“There’s a necessity to know where they went,” said Posey. “It’s like letting a pedophile slink out the door or change neighborhoods. We’re dealing with the same type of problem here.”

Wow!! Representative Posey is being aggressive here, but I commend him because the nation still deserves answers to so many Madoff questions that have been swept under the SEC’s and FINRA’s rugs. The WSJ continues:

Schapiro strongly disagreed. “These aren’t bad people. In some cases they were people who were very junior and not adequately trained or supervised.” In other cases, she said, they were pulled from one project to another.

‘Junior people’ logically implies that in other cases there were senior people. In fact, the people calling the shots on the Madoff investigation were certainly not junior.

Why were the investigators pulled from the Madoff case? Were some of them getting too close for comfort? Were they asking too many questions? Were they being frozen out by the SEC’s inner circle? I do not ask these questions in a rhetorical fashion. I ask them because those were the clear cut impressions left by an SEC attorney well trained in the school of options trading who was making real progress in deciphering the Madoff scam. To whom do I refer? Longtime readers of Sense on Cents and listeners to No Quarter Radio’s Sense on Cents with Larry Doyle may recall my interview in October 2009 with Genevievette Walker-Lightfoot, a former SEC attorney who investigated Madoff. Genevievette was not bashful in excoriating the senior laden ‘inner circle’ at the SEC. Perhaps Mary may want to listen to the interview or call on Ms. Walker-Lightfoot. Maybe she’ll learn something.

What does Mary Schapiro have to say now about the impact Mr. Madoff has made on current work at the SEC?

During examinations, Schapiro said, “We don’t rely on the word of somebody like Madoff.”

Wow!!!!

Mary has some set of cojones!! Industry insiders have shared with me that Mary kept close company with Mr. Madoff at industry conferences. Now she has the balls to let America know that SEC investigators do not currently rely on the word of somebody like Madoff.

You can’t make this stuff up.

Sense on cents compels me to inquire, “Mary, how would you even know? If you were not able to detect the likes of a scam artist such as Madoff for decades, what makes you think America believes you might be able to detect another scam artist now?”

Yes indeed. If my aunt truly did have balls, she would be Mary Schapiro.

LD

/ Bumped up /

Well, this came as a bit of a surprise, a pleasant one at that. You will recall that Rep. Maxine Waters had inserted a provision into the Financial Reform Bill creating quotas for women and minorities for financial institutions.

But not so fast says the US Commission on Civil Rights, as this article by Caroline May makes clear, U.S. Commission on Civil Rights Demands Changes to Democrats’ Financial Reform Bill. That pretty much says it all, but wait until you see what some of the members actually said about this issue:

[snip] Commissioners Peter Kirsanow, Ashley Taylor, Gail Heriot, and Todd Gaziano affixed their names to the letter, which charges the Senate with either “consciously or unconsciously” promoting discrimination.

“All too often, when bureaucrats are charged with the worthy task of preventing race or gender discrimination, they in fact do precisely the opposite,” the letter reads. “They require discrimination by setting overly optimistic goals that can only be fulfilled by discriminating in favor of the groups the goals are supposed to benefit.”

The letter continues, “In this case, the bureaucrats are not even being asked to prevent discrimination, but to ensure ‘fair inclusion.’ The likelihood that it will in fact promote discrimination is overwhelming.”

Holy moley – they are not mincing any words here. And good for them for that. But they did not stop there:

[snip] “Some legislators have evidently come to think of women and minorities as just another constituency whose leaders must be brought on board with incentives when major legislation is being considered,” the letter says. “The notion that legislation should include ‘a little something’ for everyone is troubling in any context, but it is especially troubling in the context of race and gender, given the requirements of the Fifth and Fourteenth Amendments to the Constitution.”

Commissioner Todd Gaziano told The Daily Caller that Section 342, whether it intends to or not, could have dire implications for the financial markets.

“The likely end of creating offices that require these types of racial and gender goals is that it will result in quotas and discrimination,” he said. “There are many existing laws and enforcement mechanisms that already prohibit discrimination. This provision, by contrast, takes affirmative steps to guarantee discrimination.”

That sounds like a fairly damning assessment to me. Clearly, there are so many problems with inserting these quotas on so many different levels. That the Civil Rights Commission is coming out against it, and so strongly, is telling. Previously, the former chief economist at the US Department of Labor, Diana Furchtgott-Roth, also came out strongly against this provision:

“This is a radical shift in employment legislation,” she said. “The law effectively changes the standard by which institutions are evaluated from anti-discrimination regulations to quotas. In order to be in compliance with the law these businesses will have to show that they have a certain percentage of women and a certain percentage of minorities.”

Furchtgott-Roth worries that this might be a harbinger of things to come.

“So what does this mean? Are we going to get rid of anti-discrimination laws all together and just put in quotas? Could this be what’s to come in other sectors?” she questioned.

And an excellent question it is. Disturbing question, too, I might add.

So what will become of this letter by some of the members of the US Civil Rights Commission on this issue? Well, I wish I could tell you it was going to make all the difference:

Commissioner Peter Kirsanow was more blunt.

“I don’t think it is going to have a substantial effect,” he said. “I think they will ignore it as they have other letters we have sent. Just recently, they ignored our concerns with the health care bill, which contains a number of highly suspect racial provisions embedded deep within the text. They will emerge at some point and we will have to deal with them.” (Emphasis mine.)

Kirsanow added that in addition to the constitutional problems associated with mandating quotas, the political implications are also troubling.

“There is considerable evidence over the years that these types of quota provisions dissolve into a political spoils system—we see it at the federal, state and local level—with certain positions being reserved for certain people,” he said.

Uh, yeah. Again, I urge you to read the full article here. It is well worth your time.

I just have to wonder why this was even put into this bill in the first place, especially if there is evidence showing it is so counter productive. Perhaps the excuse, um, I mean, explanation, will come to light at some point (though I am not holding my breath). At the very least, I hope this provision is removed.

I’m not holding my breath for that, either.

When the day of reckoning comes, the record will show that those misguided, incompetent and reckless legislators who supported and were supported by the house of cards known as Fannie Mae and Freddie Mac will have cost our nation untold hundreds of billions of dollars. In fact, the losses attributed to these organizations may ultimately cross the trillion dollar threshold. Think about that for a second.

While Franklin Raines, Leland Brendsel, Daniel Mudd, and other Fannie and Freddie execs walked out the door with tens of millions of dollars, our nation is left with a financial sinkhole that will serve as a drag on our economy for years if not generations. How and why did this happen?

Shallow, weak, and financially illiterate legislators from both sides of the aisle were bought off by their crony counterparts at Fannie and Freddie. The costs of those ‘payoffs’ are currently unknown, but will be felt for a long time.

Bloomberg addresses the reality of what will likely be the escalating costs embedded in Fannie and Freddie by writing, Fannie-Freddie Fix at $160 Billion with $1 Trillion Worst Case:

The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.

Fannie and Freddie, now 80 percent owned by U.S. taxpayers, already have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund. That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts.

“It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.

While the losses at Fannie and Freddie continue to mount, do not forget that these losses are not reflected on Uncle Sam’s balance sheet (Fannie and Freddie are in receivership). The fact is Washington at large and the Obama administration specifically do not now have, nor have they ever had, the political will and courage to face the reality of the financial charades created within these organizations. What is the key to measuring the depth of theses sinkholes? Expected losses resulting from future delinquencies, defaults, and foreclosures on mortgages held by Fannie and Freddie. What are the prospects on this front?

The composition of the $5.5 trillion of loans guaranteed by Fannie and Freddie suggests that the surge in delinquencies may continue. About $1.98 trillion of the loans were made in states with the nation’s highest foreclosure rates — California, Florida, Nevada and Arizona — and $1.13 trillion were issued in 2006 and 2007, when real estate values peaked. Mortgages on which borrowers owe more than 90 percent of a property’s value total $402 billion.

Fannie and Freddie may suffer additional losses as a result of the Treasury’s effort to prevent foreclosures. Under the program, banks with mortgages owned or guaranteed by the companies must rewrite loan terms to make them easier for borrowers to pay.

How long might this entire mess take to unwind and what are the impacts on our nation’s housing market? The Obama administration’s programs  to modify mortgages are ultimately a stalling tactic to stem the foreclosure process. What does that mean for the future of our housing market? Let’s visit housing and mortgage expert Mark Hanson who recently wrote that at the current pace of foreclosures, it will take 101 months (that’s right, over 8 years!!) to clear the number of loans in the distressed pipeline.

Add it all up, and we are talking potentially a trillion dollar loss and almost a decade for our nation to reconcile the housing mess driven by Fannie and Freddie, facilitated by their Washington cronies.

Nice legacy.

LD

Recently, we have been focusing on our neighbors to the south as we discuss issues of illegal immigration. But while we have been focusing our energies down there, something has been going on up in Canada. And it’s big.

What is it, you may ask? Well, this: Soaring Costs Force Canada To Reassess Health Model. Oh, dear. Isn’t this the model the Democrats claimed worked so well, and was one to emulate here in the States? Wasn’t that the constant rallying cry to shove through Obamacare, whether we wanted it or not (and “or not” was what we wanted)? Were not those of us who tried to point out that there were very real problems with the Canadian system scoffed at, derided, and dismissed? Yes, yes we were.

Well, here’s the thing. Once again, we were right, as the article mentioned above demonstrates:

Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

Ontario, Canada’s most populous province, kicked off a fierce battle with drug companies and pharmacies when it said earlier this year it would halve generic drug prices and eliminate “incentive fees” to generic drug manufacturers.

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit — an idea that critics say is an illegal user fee.

And a few provinces are also experimenting with private funding for procedures such as hip, knee and cataract surgery.

It’s likely just a start as the provinces, responsible for delivering healthcare, cope with the demands of a retiring baby-boom generation. Official figures show that senior citizens will make up 25 percent of the population by 2036.

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

Huh. Here Canada is having problems, and their relationship with drug companies seems to be a tad bit different from the one Obama has. That is to say, they are actively fighting them, and fighting FOR their citizens, as opposed to Obama making a deal with Big Pharma from the Get-go which definitely was in Big Pharma’s favor. Yt, Canada is having problems:

MIRROR IMAGE DEBATE

In some ways the Canadian debate is the mirror image of discussions going on in the United States.

Canada, fretting over budget strains, wants to prune its system, while the United States, worrying about an army of uninsured, aims to create a state-backed safety net.

Healthcare in Canada is delivered through a publicly funded system, which covers all “medically necessary” hospital and physician care and curbs the role of private medicine. It ate up about 40 percent of provincial budgets, or some C$183 billion ($174 billion) last year.

Spending has been rising 6 percent a year under a deal that added C$41.3 billion of federal funding over 10 years.

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

“As Ottawa looks to repair its budget balance … one could see these one-time allocations to specific health projects might be curtailed,” said Mary Webb, senior economist at Scotia Capital.

Brian Golden, a professor at University of Toronto’s Rotman School of Business, said provinces are weighing new sources of funding, including “means-testing” and moving toward evidence-based and pay-for-performance models.

“Why are we paying more or the same for cataract surgery when it costs substantially less today than it did 10 years ago? There’s going to be a finer look at what we’re paying for and, more importantly, what we’re getting for it,” he said.

Other problems include trying to control independently set salaries for top hospital executives and doctors and rein in spiraling costs for new medical technologies and drugs.

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

SEVENTY PERCENT?? Well, I don’t have to be a Nobel Prize Winner in Economics to know THAT is not good (though these days, accomplishments have become passe – ahem):

“Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them,” Ontario Finance Minister Dwight Duncan told Reuters.

The province has introduced legislation that ties hospital chief executive pay with the quality of patient care and says it wants to put more physicians on salary to save money.

In a report released last week, TD Bank said Ontario should consider other proposals to help cut costs, including scaling back drug coverage for affluent seniors and paying doctors according to quality and efficiency of care.

Those sound like some possible options, but the outcome is unclear:

WINNERS AND LOSERS

The losers could be drug companies and pharmacies, both of which are getting increasingly nervous.

“Many of the advances in healthcare and life expectancy are due to the pharmaceutical industry so we should never demonize them,” said U of T’s Golden. “We need to ensure that they maintain a profitable business but our ability to make it very very profitable is constrained right now.”

Scotia Capital’s Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. “(The public) will use the services more wisely if they know how much it’s costing,” she said.

“If it’s absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?”

But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.

“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population. But I think, from an economist’s standpoint, we point to the fact that sometimes Canadians in the short term may not realize the cost.”

($1=$1.05 Canadian) (Reporting by Claire Sibonney; editing by Janet Guttsman and Peter Galloway)

Isn’t that the single biggest issue right now? Once a social program has begun, people do not want to give them up? Isn’t that what happened in Greece? Isn’t that a big problem for the US, too? We continue to expand and extend programs that have massive benefits we cannot afford. For example, did you know in some states Unemployment Benefits were extended to 99 weeks? I’m sure you can do the math, but that’s almost 2 years! Could that money not have been better used in a WPA sort of way? Or some other jobs-creation plan? There are claims that the EUC is actually expanding unemployment. That is, simply put, problematic.

But here’s the biggest problem with the whole Canadian health care crisis compared to ours – our financial numbers were fudged. Only after the bill became a law did the REAL numbers start coming out, and they are NOT good. Check out what former CBO Director Douglas Holtz-Eakin stated recently:

Watch the latest news video at video.foxnews.com

Yikes. Again, this is what happens when a bill is rammed through without people bothering to read it first, filling it full of pork and giveaways, and expecting more service for less money. That is to say, it was fraught with problems from the beginning. We can only hope that before it is fully implemented, there is a massive overhaul or repeal.

I am all for people having health care, but as I have said before, let’s be smart about it. Do our homework first. REALLY look at the numbers, get out of Obama’s Big Pharma deal, and do right by all of our citizens, not corporations or political parties. Let Canada be a warning to us.

Do you hear a grinding sound? Listen a little harder. That sound is the brakes being applied to the U.S. economy.

The current price action in commodities markets (as highlighted in my commentary yesterday, “Commodities Growling Like a Bear”) is very much reflective of this braking process. How do we measure the slowing? Where can we gain evidence? Let’s turn to Rick Davis’ fabulous work at Consumer Metrics Institute.

Recall that Rick has not only been way out in front with his calls on the growth of the U.S. economy, but also very accurate especially given that he is projecting GDP a full 4 months prior to its official release. Rick is already on record with his call of -1.5% GDP for the 2nd quarter 2010. What does Rick see for the 3rd quarter?

May 30, 2010 – BEA Lowers 1st Quarter GDP Estimate as the Consumer Metrics Institute Previews 3rd Quarter GDP:

On May 27th the BEA released its first revision to its 1st Quarter 2010 GDP growth rate measurement, lowering the number from a 3.2% annualized growth rate to 3.0% annualized growth. One day later the Consumer Metrics Institute’s ‘Daily Growth Index’ was signalling what we should expect the BEA’s measurement of the 3rd Quarter 2010 GDP growth rate to be: contracting at about a 2.0% rate.

The prior BEA estimate of 1st Quarter 2010 GDP growth trailed our ‘Daily Growth Index’ by 127 days, and because of the rapid rate that the economy was cooling when the measurements were being made the newly adjusted estimate is now trailing our ‘Daily Growth Index’ by 125 days. Since the 3rd Quarter of 2010 ends 125 days after May 28th (when our ‘Daily Growth Index’ was recording a ‘growth’ rate of -1.99%), if the BEA estimates continue to trail our ‘Daily Growth Index’ in a consistent manner we should expect that the 3rd Quarter’s GDP ‘growth’ rate will be in the -2.0% neighborhood.

Several things were interesting about the BEA announcement, which seems to have been largely ignored by the equity markets on a day when the Dow Industrials were up over 280 points. Not only was the total growth rate revised downward by .2%, but the impact of inventory building was adjusted upward from 1.57% to 1.64%, meaning that the end growth rate of consumer demand (net of inventory build-ups) was dropped from about 1.63% to something closer to 1.36% — a 17% reduction that was hardly worthy of a 280 point rally in the markets. Perhaps the U.S. equity markets should obsess less about Greece and Spain and pay more attention to what is happening with consumers in their own domestic economy.

Since we first reported that our ‘trailing quarter’ had slipped into contraction on January 15th, we have charted how the current 2010 version of the consumer contraction event compares with prior similar events in 2006 and 2008. The current event is significantly different; while it is not as severe as the 2008 contraction, it has already lasted longer without forming a clearly defined bottom. We know that if the GDP mirrors consumer activities (as at least 70% of it should, net of inventory adjustments), both the 2nd and 3rd quarters of 2010 should be contracting at a level of between 1% and 2%. If this isn’t a classic ‘W’ shaped ‘double dip’, it is at least the downward glide of a plane with sputtering engines.

From our perspective the ‘economy’ lives where the consumer spends; everything else is merely the consequence of the downstream flow of commerce from the initial consumer ‘demand’. For this reason the official GDP measurements poorly reflect what is happening in the real-time economy, because they merely capture backward-looking factory production levels far downstream, as augmented by governmental redistribution of earlier tax collections and new public debt. Even John Maynard Keynes would have had to admit that governmental stimulus has to ultimately cause increases in aggregate consumer demand for a real recovery to be happening. We simply aren’t seeing that yet.

What is around the bend as we navigate the economic landscape? A double dip on our economic trail. Thanks to Rick Davis and the Consumer Metrics Institute for his fabulous work.

LD

Is the American taxpayer ultimately bailing out the European Union? Far fetched? Don’t be so sure.

While the focus of the European bailout has been on the European Central Bank, the European Union, and the IMF, little attention is being given to swap lines which were reopened between the Federal Reserve and the European Central Bank.

The ECB has steadfastly fought the idea of breeching the principles which formed the European common currency (the Euro) in order to fashion a bailout for the EU. Did the ECB crater to political pressure by the EU? Or, did the risks of the bailout shift from the ECB to another large central bank? Such as? The Federal Reserve!

Adding fuel to this fire is the fact that the Fed reopened swap lines with the ECB and other central banks just yesterday. The Wall Street Journal reports, Fed’s Swap Decision Could Ratchet Up Political Pressure:

The U.S. Federal Reserve’s decision to reopen swap lines with the European Central Bank and central banks in Japan, Switzerland, England and Canada puts it in a delicate political position.

The U.S. Congress is in the midst of rewriting a financial regulatory overhaul that could rein in the Fed amid sharp criticism of its actions before and during the financial crisis. The overseas lending program it reopened Sunday in response to pleas from Europe has been among the programs lawmakers have criticized, with some suggesting it is bailing out foreign banks and other saying the Fed is too secretive about details.

Is the American taxpayer ultimately bailing out the EU? While the German populace is livid at the idea of providing bailout funds for the wastefulness and fiscal follies in other EU countries, has the wool just been pulled over the American public’s eyes?

Will the America public ever learn what is going on here?

Audit the Fed!!!

Hat tip to loyal Sense on Cents reader Matt for providing the following video from last summer:

LD